This week, I was asked to say what I thought would happen with the property internet industry between now and 2015.
This is what I wrote. But am I along the right lines? I’d be interested in your thoughts.
But will consumers pay for this gold standard? Or will they opt for cheap (but maybe not so cheerful) online services which may do little more than provide a marketing service whilst sellers and buyers do all their own viewings and negotiation? And which, by the way, will be only very lightly regulated by the law (the OFT’s own words).
Some of these cheaper services may not be just cheap – they may even be free, as per Sarah Beeny’s website Tepilo – or monetised in a different way. But how? And will the consumers know?
However, the real battle will go well beyond the legalities and will be all about disintermediation.
It will be fought as to how well private sellers and buyers can deal directly with each other, and in particular how well they can handle the intricacies of holding together chains, gazumping, gazundering and the timetables imposed by lenders, surveyors and conveyancers – not to mention people who simply change their mind.
My suspicion and hope is that just such a battle is necessary in order to expose the value of the service that estate agents offer. Over the years, the industry has cleaned up its act. Personally, I would never want to handle the sale or purchase of a property, and I would certainly expect a high level of service, for which I would positively want to pay, to incentivise that service.
After all, why save an average of £1,500 estate agency fees when you might get an extra £10,000 on the price someone else could negotiate for you? Also, I have never understood why many consumers understand that they must pay legal fees but not estate agency fees.
However, as a property editor in the ‘trade’ sector, I may be too close to the industry, and no doubt, over the next five years, others will decide its direction.
Comments
I'm not in favor of High street agents anymore, as some agents are just plain lazy, it’s too long winded and from previous experience I’ve had to chase them up about my property rather than the other way around. I think if you have had good experience in selling your own property, then you are able to negotiate between the buyer very well. Do I really want to pay thousands of pounds for someone else to do something I can do myself?
I'm not in favor of High street agents anymore, as some agents are just plain lazy, it’s too long winded and from previous experience I’ve had to chase them up about my property rather than the other way around. I think if you have had good experience in selling your own property, then you are able to negotiate between the buyer very well. Do I really want to pay thousands of pounds for someone else to do something I can do myself?
I sold my last property online for the first time ever. Initially I felt that there were risks of selling your property online, but then again who wouldn't feel this way. But I decided to give it a chance. I did some research on online estate agents like zoopla.co.uk, eMoov.co.uk and other leading online agencies. I also asked family members, who they sold their properties online. They recommended emoov.co.uk. So what was the worry about? Ultimately, a majority of the public are online to find and sell property. I sold my property through eMoov.co.uk . My house got sold within 2 months! I saved just over £3000 in estate agent fees.
Online estate agencies are the way forward! If high street estate agents want to compete with online agencies, they need to implement new ways of pushing their way further in the online world.
I'm not in favor of High street agents anymore, as some agents are just plain lazy, it’s too long winded and from previous experience I’ve had to chase them up about my property rather than the other way around. I think if you have had good experience in selling your own property, then you are able to negotiate between the buyer very well. Do I really want to pay thousands of pounds for someone else to do something I can do myself?
I sold my last property online for the first time ever. Initially I felt that there were risks of selling your property online, but then again who wouldn't feel this way. But I decided to give it a chance. I did some research on online estate agents like zoopla.co.uk, eMoov.co.uk and other leading online agencies. I also asked family members, who they sold their properties online. They recommended http://www.emoov.co.uk/. So what was the worry about? Ultimately, a majority of the public are online to find and sell property. I sold my property through emoov.co.uk . My house got sold within 2 months! I saved just over £3000 in estate agent fees.
Online estate agencies are the way forward! If high street estate agents want to compete with online agencies, they need to implement new ways of pushing their way further in the online world.
PropertyMatch:
Never before have I read such ridiculous waffle purporting to be informed knowledge.
THEN, I search you out on the internet and find you spout this drivel on your website. You may be able to convince the uninformed - but you are sadly wasting your time cutting and pasting your sales pitch on this site.
In fact - I am reading some of the 'articles' you publish and find your practices to be FAR more unsavoury and unprofessional than any Estate Agent I have come across in 31 years in the property industry.
Trevor Mealham is correct when he says "both online and traditional agents can place listings on the same portals side by side".However, to say "So the successful agents will be those with a presence over others in the community" is missing the point.
The successful agents in my opinion will be those who put in the extra to ensure that their listings stand out from the others (right next to them).
Side by side excellence stands out. The portals provide all agents (on or off high street) with the same shop window. Yet 99% of all agents go bog standard, a handful of crappy snaps and some boring text. That is NOT being a master of marketing (kids on ebay do better).
Most agents claim to be forward thinking, bang up to date with technology, masters of intelligent marketing techniques etc.But, market expensive property with exactly the same tat as cheap property. That is why vendors do not pay more.
You are making it a tough sale. Top fee for bottom product = very hard to sell.
Yet the top marketing that you claim to be master of (because you know that is what vendors want) is easy and inexpensive to have. I don't like this phrase, but, it fits well. 'It is a no brainer', you know they want excellent marketing, they are also willing to pay for it. Let them have it, or at the least give them the option. One size does not fit all.
There is a fundamental point worth stating here.
The reason why new methods of transacting house sales are needed in the UK is that estate agents have, for a long time misrepresented market values by skewing current house prices and causing untold damage to the smooth operation of the property market.
Successive booms and busts in house prices are testimony to this. There is no reason why house prices should need to fluctuate so wildly, even when our economy itself is in crisis.
If you look closely, you will see that houses, being a basic need of society, should command a relatively stable price. This should depend upon current wealth and not on borrowing capability. The sole reason they are is not, is the over-exuberant activity of estate agents, who simply guess asking prices and try and force unwitting buyers into paying these by borrowing huge amounts. They even help people to borrow the money!
Its time a new, more professional, and reliable method is found for transacting house sales.
Now that the vital information for doing house valuations is publicly available, if estate agents can't do these properly, owners can entreat others to do proper valuations for them.
If agents don't get their act together quickly it is, for the first time ever, now possible for other entrepreneurs to take on the job and to do it more effectively.
The latest improvements in transparency within the housing market, as outlined above, would have a considerable stabilising affect on the whole UK economy and therefore have great merit, especially in the present economic downturn.
We say its time for agents re-tuned the way they do business, if they are to remain viable.
The throughput of completed sales over time graph should remain smooth if the market is working efficiently.
Spot on Adam !
1 completion today, 1 sale agreed and one instruction taken - but I did still manage my traditional Friday afternoon nap in my first floor office ........
Whilst the public have a choice, High Street Agents will be the agents of choice. This is confirmed by the number of Estate Agent boards in any street, town, city or village in the UK. Selling a property and acting for a Vendor is a personalised business. The public will decide which type of agent and which particular agent to use. Trust is a key factor.
Do both - offer different levels of service. Stop griping!
this article is a misleading interpretation of online agency. It is possible to be online and charge the same fees as high st and provide as high level of service wth accompanied viewings etc. The idea that online estate agency revolves around impersonal call centres is simply not true in all cases.
Those that don't use the internet, may not be here in 2015. They rely on local experts, which also means you do need traditional services. Tesco et all will not sit down with a pensioner and show them how it all works. Once bitten twice shy users of Tesco services will be our best advertisers for their next move.
(Extract from this weeks RAT (Rawlings Agency Tips): One of the most overlooked truths of estate agency is that people tend not to buy the property about which they enquired, but usually another one the agent offered them following their enquiry that was better suited to their needs (and probably a bit more expensive than they anticipated as well – hence it being better than the one advertised). So whilst anyone could indeed advertise their property privately, the chance of this actually delivering a buyer as a direct result is low.
Secondly, the best way to secure the fastest sale at the highest price is to expose the property to the maximum number of well qualified active buyers. The only person who has access to such a resource is a local estate agent -you. You intimately understand your buyers and know precisely the right ones to bring round – the best ones often being those who would probably not have viewed the property unprompted.
Utimately I agree that the "battle" will only seek to raise awareness of the benefits of using an estate agent. Even in the USA (5-8% fees) only 19% of people sell privately, of which 40% are "in-family" sales.
Have a great weekend.
Devon Agent. I would be interested to talk with you. How best to contact you.
Jim makes some good points, but I do feel that as an industry we always view this in an unduly 'black and white' manner. I am a 15 year veteran in this business and have worked for both corporate and independent agencies and have sold everything from small terraces to country houses. I now run a 'one man band' agency from home, but it is certainly not an 'internet' agency. I do use the major portals but a great deal more of my advertising spend is in the press, as it just has to be. I don't believe that a purely 'online' agency can ever work.
The majority of sales are buyers introduced via the web and boards. Both traditional and online agents will exist. Its a personal choice as to where your telephones and emails are received. The fact is if you don't have listings on, you can't sell or let them. What is seen is that so long as regulated both online and traditional agents can place listings on the same portals side by side. So the successful agents will be those with a presence over others in the community. Brand awareness and the right message to capture new clients.
The leader of the fractioning of property selling is clearly Rightmove, and I think this gives us the best insight into where the divergence is heading. The different model between the two services, online vs high street, already existed before the big portals, or even the internet came along. Anyone who has worked for a big corporate, or sold through one, will be aware that the proceedure is to get the vendor to show the property, which is why many negotiators would share one (senior negotiators) company car. The stackem and rackem approach to selling and service. Sell many and sell them quickly. It was exactly these corporates that started Rightmove in the first place. Remember? There is nothing whatsover stopping you opening an online agency. A few quid for an off the shelf package, no staff, no rent or rates. Simple. Too Simple. There are literally millions. There lies the proplem. No-one can find you. These means that only a very small number will be successful. Because the online equivalent of rent, rates, wages, etc is a massive TV and radio campaign. The portal is not the market tool, it is just a store. The marketing is the ten million quid that went on adverts. The real choice that consumers will make has nothing to do with price or service. The vendors that continue to use a high street agent will be those who just don't "get" the internet. The same people who call out an electrician to change a fuse. Agents fear the internet because they all rely on it. They forget that most of their potential clients don't. Use the kettle, but wouldn't change the fuse. Always on facebook, but....
I find this rogue pirate image quite exotic - but in reality have successfully developed the concept of traditional estate agent off the high street over the last couple of years - after 30 years ownership of a mixed general practice with a residential base. Yes the concept / system offers strong agents an alternative. Yes overheads are a fraction of what they were - yes I have to work harder to overcome the lack of a show room - and yes - I enjoy every bit as much ever, the goodwill and friendship of my competitors. But this is Yorkshire. The internet is just a very efficient alternative to the old ways of obtaining leaflets - nothing more.
Yes private sales will re emerge - before all this interwebby business as many as 10% of people sold privately.
Where our industry goes badly wrong is in perpetuating the myth that the strength of the agent is in their marketing ... the public know full well that the buyer is likely to have found the property online.
We all know that 95% of the job isn't finding the buyer - but everything else that needs nursing along ... it's time we got this message over, rather than bitching about fresh approaches.
There is a continuing misconception that 'online'agent means 'private sale'. This perception may suit the High Street agent as something to warn the public of in terms of getting whjat you pay for etc, however it just isn't the case in reality.
To assume that an online agent cannot chase a sale through, offer advice, value property and do just about everything that an expensive, traditional, high Street agent does, is really missing the point.
By 2015 there will be High Street agents. Just far fewer of them. There will also be online agents offering the same for less, and lots more of them.
I doubt that the true private seller will exist (not that he does now really) as he will doubtless see no need to do the work himself when an online estate agent (yes, estate agent) will market and sell his home and see it through to completion for hundreds rather than thousands in fees.
They have had web v realtor in the US for ages and Realtors do fine. The facts remain: 1) When you put buyers and sellers together it very often ends in an arguement. 2) The agent normally gets a higher price. 3)People inherently like the peace of mind of a second opinion and someone on their side. 4) The british often like to be remote from the sale, ie not in during viewings. 5) 50% are not tight ar*es and know as everyone does that YOU GET WHAT YOU PAY FOR. We have someone selling with an internet agent in our town that is too stupid to notice that that have an £80,000 plot out the back. If the agent had bothered to go around there he may have noticed!! £80,000 extra for a £1500 fee compared to £750? you work it out.
Then again, if you look at a Company like House Network. They have 1000's of properties advertised on Rightmove and they are an online Company registered with the NAEA. They offer in person valuations, they negotiate remotely from their office and feedback and then they offer administration support throughout the transaction. This is more than some Highstreet agents do at ultimately 5 or 6 times the price.
As their is clearly with a High Street agent, there will be good on-line companies and poor imitations who think that price alone is enough to tempt business, which we all know it isn't.
As the web improves, the new on-line companies too will become more technologically gifted and creative too and in my opinion one day very soon will see the emergence of an on-line brand, that actually does do very well and will start to impact the market share available to High street agents. I'm not suggesting for one min ute that all High Street agents need to be overly concerned just yet, but they will need to develop and allign their business stratedgy to compete with more forward thinking Companies, which might just be web based models.
YOUR MOVE has made a move out of the high st. Currently it seems to be working. Most people look in an estate agents window most by auto-suggestion, because its there. Maybe that is why people choose that agent because he is there! Outside of the initial interface and the neg doing a viewing, most interaction is now either done by email or phone, or who know maybe more in the future by web cam.(Now there's an idea) The internet has levelled the playing field. There are a lot of very good agents certainly not on the main high street. Being an online agent does not mean you don't offer accompanied viewing, why should it imply that. A good few newish london agents are office based. At the end of the day it does not matter where you are based, its whether you sale/let the property. In principle most agents use the same internet portals and do marketing in mostly the same way. Surely it must come down to service, and do you need to be on the high street to offer a service? Does amazon's success not speak for itself.
Selling a home is unlike any other transaction a person can make because of the combination of factors such as it's high value, the complexity of managing chains, the emotion involved on both sides and dealing with solicitors, surveyors and mortgage companies. Sensible vendors have always, and will always choose an estate agent who provides a full service backed by local expertise. There has always been a Private Sale option (which is effectively what online only agents are offering), yet still around 90% of vendors CHOOSE to use an agent. The greater threat posed to the industry is of the new startup agents with a high street presence with very low fees, who use the Internet to be more efficient and run with lower costs, allowing them to still make a viable business out of fees as low as half a percent. We have very well established clients losing more instructions to agents like this than to online agents and I think fees is where the battle will be fought. What the industry must try and do is a better PR job on itself about how it adds value through local knowledge, expertise and professionalism. People want and are prepared to pay for good service.
Many people this week have made comparisons between estate agency and the travel agency business and correctly pointed out that most holidays are now booked online which leads them to the conclusion that the future of estate agency is online. I believe there is little doubt that without a fantastic web presence firms will lose business but I don't believe people will ever feel as comfortable parting with several hundred thousand pounds and then having the transaction dealt with by a call centre (ever used CWPL?) After you book a holiday there is very little that needs to be done. It doesn't require chasing, I have never phoned up Thomas Cook and asked if they had bought the fuel for my flight or whether the hotel had enough sunloungers. People do want to save money wherever possible but I know I get business even when competitors are offering lower fees (admittedly not quite as low as Tesco propose). When we pitch for business it is a bit of a beauty parade but I'm no oil painting and still going....
What suprises me is how so many people act as if the internet is something new. Almost since the internet began, there have been cheaper ways of TRYING to sell peoples home and High Street Agents are still prominent. If internet was going to play such a huge part in everything to do with consumers, why are tesco still buying up every piece of available land and building massive superstores when they could just have an online site. I think people have already and will continue to become disillusioned with internet services due to the fact it is so easy to scam and rip people off (not saying that some agents don't). I think you are absolutely right with paying that bit extra though for the local knowledge, negotiating skills and applicant database that SOME estate agents offer. I respect that other peoples views may differ but these are my opinions.